|

MicroStrategy's correlation to Bitcoin price surpasses 67% while MSTR skyrockets

  • MicroStrategy's stock value skyrockets by 200% since its investment in Bitcoin.
  • The correlation of MSTR to NDX remains at zero but has grown by 67% to Bitcoin.

MicroStrategy Incorporated (Nasdaq: MSTR) stood out in 2020 as one of the companies that went all-in on Bitcoin as an investment asset. The company's core business is intelligence while it is publicly traded on Nasdaq.

Following the investment, MSTR's correlation to Bitcoin (BTC) has grown by 67%. In addition to that, its stock has increased in value by a massive 200%.

MicroStrategy reaps the fruits of investing in Bitcoin

On December 21, MicroStrategy purchased an additional 29,646 BTC for roughly $650 million. The coins were bought in cash as per the terms provided by the Treasury Reserve Policy at an average cost per coin of $21,928.

The intelligence company is said to hold 70,470 Bitcoin with an approximated value of $2.5 billion. According to the CEO of the firm, Michael J. Saylor:

The acquisition of additional bitcoins announced reaffirms our belief that Bitcoin, as the world's most widely-adopted cryptocurrency, is a dependable store of value.  We believe the proactive management of our balance sheet, combined with the improved revenue and profitability performance of the company, have been significant factors in the recent appreciation in our stock price.

The optimistic outlook highlighted by Saylor has been confirmed by the 200% growth in the value of MSTR. With the correlation between the stock asset (MSTR) and the unconventional digital asset (BTC) growing to roughly 67% in the last 30 days, it is evident that the flagship cryptocurrency can be a growth catalyst to traditional investments.

MSTR/BTC/NDX chart

MSTR/BTC/NDX chart

The chart below shows a near-zero growth value of Nasdaq (NDX) within the same period. Another chart shows MicroStrategy's return on Bitcoin treasury holdings growing by over 60% from levels slightly above 40%.

MicroStrategy return on BTC investment

MicroStrategy return on BTC investment

The spike in the correlation between MSTR and BTC is an immaculate example of the benefits other firms can realize if they invested in the pioneer cryptocurrency. Other firms are likely to take advantage of the spike in the correlation and diversify their investment into Bitcoin.

Institutions such as Massachusetts Mutual Life Insurance (MassMutual) could increase their $100 million holdings in Bitcoin. Guggenheim Investments is likely to sink more money behind the cryptocurrency, considering that the firm's CEO, Scott Minerd, recently told Bloomberg that his BTC trading $400,000 in the future.

BTC/USD 4-hour chart

BTC/USD 4-hour chart

Bitcoin is trading at $34,650 after hitting a new all-time high at $35,888. As discussed earlier, the forerunner is getting ready for an ultimate liftoff to $50,000. However, investors should expect a correction or consolidation before the breakout. For now, establishing support at $34,000 is key to sustaining the uptrend.

Author

John Isige

John Isige

FXStreet

John Isige is a seasoned cryptocurrency journalist and markets analyst committed to delivering high-quality, actionable insights tailored to traders, investors, and crypto enthusiasts. He enjoys deep dives into emerging Web3 tren

More from John Isige
Share:

Editor's Picks

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

Ripple bulls build new support base amid RLUSD payments expansion

Ripple ticks up for the second day in a row on Friday, trading at $1.34. The remittance token holds above medium-term structural support; however, strong supply near $1.40 caps upside. A break above this area would reinforce the bullish grip.

Busy week for Ripple’s RLUSD: What changes for stablecoin holders?

Ripple’s RLUSD is gaining ground across institutional finance, with a major bank launching custody services, a new wallet integration making it easier for developers to build payments and agentic experiences on the network, and a brokerage platform planning to use the stablecoin for settlement.

Bitcoin Weekly Forecast: Macroeconomic headwinds, cooling demand cap BTC gains

Bitcoin extends its correction this week, trading below $82,500 on Friday, as selling pressure continues. Hotter-than-expected US CPI and PPI data point to broader inflation pressures and persistent geopolitical uncertainty, weighing on risk sentiment.

Bitcoin: Macroeconomic headwinds, cooling demand cap BTC gains
Bitcoin (BTC) extends losses this week, trading below $82,500 as of Friday as selling pressure continues. Weakening institutional demand supports this pullback as BTC spot Exchange-Traded Funds (ETFs) are on track to record a two-week withdrawal streak, reaching $146.19 million in net outflows through Thursday.